For April the UK services PMI came in pretty much in line with forecasts at 50.4 meaning that while the index has returned to expansion territory, activity in the country’s largest sector remains subdued.
Looking at the components the outlook appears less favourable with new orders continuing to shrink and a reading of 49 means this data point is on its longest run in contraction territory (below 50) in a decade. The release is the third and final PMI reading in as many days and the overall message seems to be that while the UK economy is just about plodding along OK, it is far from firing on all cylinders.
The market reaction has been pretty muted for the pound at the end of what has been a good week for the currency, with sterling making impressive gains in the first couple of sessions before fading a little but the market is still higher against all of its major peers on the week.
As far as equities are concerned, the FTSE is set to post a second consecutive weekly loss and even though the benchmark has seen a bit of a bounce off Wednesday’s lows investor will be mindful that we are entering a period that has traditionally been weaker for stocks with the “Sell-in -May” adage sure to be rolled out several times in the coming weeks.